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tv   Bloomberg West  Bloomberg  March 11, 2014 1:00pm-2:01pm EDT

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♪ >> live from pier three in san francisco, welcome to "bloomberg west." i am emily chang. new controller of sprint says he will start a massive price war if regulators let him by t-mobile. --by buy t-mobile. big game relief, titan fall goes on sale for xbox one.
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we will discuss. first, a check on your top headlines. alibaba is paying one $.4 million for a majority stake in the chinese media group. access to china vision film and television shows as they try to diversify their offerings and compete with other technology giants. alibaba is considering an ipo. they said just last week that the company has decided on a time frame. music streaming see -- streaming service, beat music, has raised $50 million in its second round of funding from investors. , will followed by dr. dre use the money to challenge spotify and other streaming services. the asian military says that the malaysian flight that went milesg was last detected west of course of its flight
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path, which means that it flew for roughly one hour with its transponder and tracking system turned off. the airplane was carrying an ibm ofcutive and 20 employees austin; dr.. dr. -- semi conductor. >> i think that this is a huge deal. he really believes he is going to convince washington to let this go through when there is every indication that at&t and t-mobile, when they were going to merge, they suggested that they were not allowed to gobble up anyone bigger. is tooot someone who reserved. >> and he is not pulling any punches. quite a character. let's take a look at what he said this morning to the u.s. chamber of commerce. take a listen. less democratic, but pay
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more? pay more by $1.7 million. is that a good situation? falling behind. speaking, there are, about u.s. global broadband falling behind. why is it more expensive and slower than the rest of the world? when this is the place that the internet was invented? >> indeed, cable providers have spent so much money with existing infrastructure laying coaxial cable into the houses, they don't want to spend the money. he is suggesting that wireless could do more with the clearwire spectrum. this is a guy, as i mentioned, who is a big cue leer individual. peculiar individual. this guy has a 300 your plan for life, the three -- the things he wants to see for the next 300
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years. what he wants to do with this company, the notion of this merger, he is pushing ahead. >> hopefully he will let us in on his mortality elixir. >> hopefully he will share. >> he also spoke with charlie rose about the possibility of the t-mobile merger and how he would approach that. take a listen. fight.avyweight >> right. >> you like that? >> i would like to have a real fight. not a pseudo-fight. massive pricere war. a technology war. >> that is your pattern. when you get a stakeholder, you undersell everybody. losere more willing to profits to gain market share. >> exactly. i want to be number one. >> well, at least he is to the point. >> masayoshi son has lawyers in
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san francisco, boston. he is obviously in japan working a lot of these deals. he has a notion of what he is trying to cobble together. the question is, what will be next for consumers -- best for consumers in the end? >> and what will regulators decide? they made it clear when at&t tried to buy t-mobile, they made it clear they wanted for separate carriers. separate carriers. they made it clear. we have a special guest joining us, harvard law visiting professor and author, susan crawford, visiting from boston. she is the author of "captive audience." susan, thank you so much for joining us. so, what do you think? is the sprint t-mobile merger good for consumers? >> price war is always good for consumers, which is what the sprint ceo is promising. what is really going on here is
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a fight over the enterprise market. they want to gain shares there. basically, we will have a lot of price-cutting in the consumer market no matter what happens. this guy says he can take a chunk of the enterprise market if you just let me in. otherwise t-mobile will just keep cutting prices and making it more difficult for him to enter into the enterprise market area and -- market. businesss higher-margin? why is that the goal? >> it is the goal because the consumer market is pretty thoroughly saturated. just about everybody has smartphones. there is very little growth right now. it is a fight over existing market share. prices are going to be going down. t-mobile is doing that right now with its lot -- with its much lower price structure. sprint has a relatively high fixed sprint -- price structure
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at the moment. they would have to make some pretty big changes. the have seen no growth on consumer side. he said he sees big growth on the enterprise side, where he has high-capacity spectrum to carry lots of information over short distances. he has got very high band spectrum that goes over very short distances that carries lots and lots of information. wi-fi. great for managed for businesses. you could see that as a tremendous market opportunity for him. >> susan, take a listen to the argument that masayoshi son made on charlie rose, when it came to at&t and verizon, and the fight he is preparing for. take a listen. >> i need to, again, become a heavyweight, right? [laughter]
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i cannot be tiny. >> that will not work. they will squish you. >> right. they are enormous. so that they can stay comfortable and fat. i want to make them fight back so that they also become muscle instead of fat. that is good for the united states. >> is there any sense that regulators will back down from this idea that they want for carriers?- four >> at the moment it does not seem terribly realistic. they have an antitrust division who said that when we mean four, they meant four. it is hard to see them backing down at the moment. some are saying that they should create a monster to take on the other two monsters. the department of justice may not want to see a monster. >> if it is that unlikely, what its masayoshi son get out of
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in the end? does he sort of know that he is embarking on a losing battle? or does he really think he has a good shot? is using the very high prices being charged by at thesend at&t relatively slow speeds as a talking point that he thinks will be very encouraging to regulators. also, tom wheeler, the sec chairman said in a blog post before he was confirmed that he could use the opportunity of a merger to propose conditions that he cannot get through the front door as regulators, which is very attractive to the sec as well. he may want to take advantage of that opportunity. >> the recent success of wireless additions at t-mobile, does that suggest to us that t-mobile could stand alone against a stronger competitor? ironically their own success has
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made them less likely to help? >> yes, the additions that they will take -- people say that they will take about one quarter of new additions in the coming year. they are really attracting buzz and energy. they are a wonderful company with a great ceo. i could see them continuing to grow. i would love to see them standing on their own. having their employees out from under deutsche telekom, which is very much like at&t. i think that they have a different character than their parent, at this point. >> the last time that i spoke with the t-mobile ceo, he sort of indicated that he wanted to run a sprint t-mobile, nation, if that were to happen. who would run the thing? money person with more and the deeper pockets will run it. i think it is unlikely, if anything, that t-mobile will grip -- will gain bulk. they will try to get more
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broadband spectrum in the next auction that comes up. all of that is good for consumers. >> all right, susan crawford, author of "captive audience," visiting harvard professor, thank you so much for visiting us here today on "bloomberg west." "titan fall" is out today. is that going to help the sales of the xbox one? >> remember, you can watch us on your tablet and mobile device. ♪
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back to "bloomberg west." mark were soft as getting it online all two player game, titan fall, hoping it will supercharge the sales of xbox one. it is being offered in a bundle with the xbox one. do you still have an xbox? are you excited about this? >> i kind of need a new game right now. i thought i would dive into the
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xbox to cover this story better. totally sucked in. >> a lot of people are very optimistic about this game, especially its prospects for helping to sell the xbox. apparently the sony playstation appears to be outselling xbox two to one. we don't have the most updated numbers. >> we hear from people that they are selling twice as much, in terms of sales, of the playstation in terms of the xbox. >> with us now to discuss, the president of [indiscernible] the gaming industry. also with us from new york, resident videogame reporter, matt miller. matt, i will start with you. how good is this game? how much of a boost will it give the xbox? >> this game is really impressive. you can see it from the people playing it online. this is a dead on shooter game that remind -- reminds me of
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that great line from the matrix. "i want more guns, give me guns." >> are you excited? >> i got it last night and hooked up and working at 3 a.m., i played it until 7 a.m. this morning. i don't want to say it's the best game i have ever played, but it is kind of like all of plus gears,lo, which are probably the three best games. it is an amalgamate -- amalgamation of those three. it does things that you can not doing any of those. you can run on the walls, jump inside giant robots. it is absolutely amazing. >> let me ask you about this. is this going to be enough to re-energize sales of xbox hardware? they made a real big decision about pricing, sony went to undercut that, that seems to have been working so far. >> that strategy is absolutely
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working. we did an intense amount of research the year before launch on pricing. this is a great, great game. i think that you nailed your description of it. i think it is going to drive boxes. the real issue is -- is it going to drive a lot of boxes? it will take a couple of months to see if this is becoming a mass hit. it could also take a lot of market share away from call of duty. >> that is an interesting point. this game is made by the guys who created call of duty four activision. they were actually fired for insubordination in 2010. they had tons of street credit to begin with, fighting the corporate man. they went over and had yet a -- ea basically fund it. call of duty sold $10 billion in revenue as a franchise. embarrassing any movie franchise out there.
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it is an amazingly huge ranch eyes. -- franchise. this is going to drive sales of sailor --he way that the way that halo did in 2001. those prices are inflated by the game prices being so much larger than a movie ticket. >> and you don't just buy the desk, you spend money when you get it. if you went to a movie for $60 and went to it over and over again. impressive,s pretty 10 billion dollars in revenue for one franchise. what does this mean for activision? for ea? that?ry, can you repeat >> what does this mean for the game makers? >> for ea, this is going to be a big, huge hit. they put tremendous effort into it. they have a great relationship
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with microsoft around it. four activision, it is a challenge. it is a challenge to make the next call of duty really spectacular. the last one did not really hold up. ghosts.e the >> you loved ghosts? my god, we never hear that in the focus group. we hear modern warfare and black ops. >> i wish there was more stuff to buy in the game. i will just sit there and click a all day long, it is the best thing these game makers have ever come up with. >> the secret is the a button, you hit that with your right thumb to buy more stuff while you are playing. >> matt miller, what would we do without you? mike, thank you so much for giving us the scoop on that. coming up, dominoes. sounds like the most tech savvy
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pizza chain out there. >> teaming up with ford. american cars, pizza, what more do you want? more technology, up next. ♪
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to "bloombergk west." i am emily chang. joining and ford, forces. >> thinking of using their fast their same price command. have you seen this? >> it is really cool. >> let me take care of that for you. your order has been placed. it will be delivered in 20 minutes to 30 minutes. your order is being prepared. would you like to track your order? >> this is going to be available
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next month. the president and ceo of domino's pizza is with us now, from new york. did you bring us pizza? >> it will be on the way to san francisco soon, i promise. >> how is my experience going to be different with these smarter chips you are making? >> we give the opportunity to customers to order from us in more ways and it is growing our sales. customer satisfaction when they order digitally is far higher than when they order over the phone. it is now over 40% of sales. we are looking at new ways that we can have customers access this brand of order from domino's. we are just very excited about it. you have dominoes live cameras throughout salt lake city. you can follow your pizza from oven to door? >> we did that in one store. we went out to social media to
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give people a sense of how we are hand making the pizza, starting from grade ingredients. it was a great way for delivery customers to get a look at the process in the stores. >> to be clear, you are not delivering the pizza to the moving car. do you expect this to add incrementally to sales? what kind of a bump up my this give you? >> it will be launched in the second quarter. i think we will get a bit of a bump. every time we go out with a new platform and give people new ways to access it, we feel a bit of a lift from that. we are just thrilled, though, to be tied in with an iconic brand, like ford. you go in, you order over the voice command. it syncs up with your mobile phone and we have profiles from customers, they will have their easy order, they're saved order.
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they can tokenize the credit card numbers, save it to the credit card company who makes it all very simple and easy. even for delivery they say that they deliver to the car and the answer is that if they go in for carryout, they will actually get it right there. guys have actually, patrick, taking a few risks. a while back you admitted that dominoes maybe had a quality problem. a taste problem. you started accepting it going. talk to us about the strategy of the willingness to take these kinds of risks. and the impact on the brand. >> we try to be smart about it, but this is a retail brand. you have to move quickly. i would rather get twice as much done and occasionally make a mistake when you are doing things that are huge investments. there is a real advantage to moving quickly, innovating, trying new things. if some things do not work
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occasionally, that is all right. >> we will be waiting for those pizzas here in our studios. thank you, patrick. we will be right back. ♪
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♪ this is "bloomberg west." we cover innovation, technology, and the future of business. sean combs, otherwise known as wants to diddy, expand his television business. according to people with knowledge of the situation, he wants to turn fuse into revolt television, a music channel that would be seen in about 23 million homes. jeff gaston and john kline are launching a subscription-based video platform and bloomberg has
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learned that the venture will be app.d tapp, meaning tv built around the world of politics, sports, fashion, and entertainment, jon erlichman is in los angeles with more. >> we have heard a lot about these high profile players watching their own network. glenn beck is a good example. this would be creating networks were a bunch of well-known names. subscribers would pay for access monthly. john kline joins us now from los angeles. decide that guys this was what she wanted to do? >> we had been talking about this for about one year or so. if you look around you see that the television industry is rapidly exploding. it is changing so fundamentally so quickly, we just wanted to be a part of that.
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we have been parts of previous disruptions in the industry, with online video, with a reality television, this felt right the right moment and the right plan. >> explain how this is going to work. sickly channels for individual personalities. whole bunch of different areas. a monthly basis. something around $9.95 per month? starting with a monthly subscription. if you purchase a whole year, you will get a discount. that is for each channel. not a bundle of channels. we hope to launch dozens of channels over the next several years. they are going to be personality based with people who have super fans. so, viewers and users who cannot get enough of these particular personalities to the point where they want a more intimate relationship with these personalities than current tv
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and online offerings afford. we hope to bring that capability these channels. >> let's talk about the potential personalities that could team up with you. there was a report that you were talking to sarah palin. any truth? >> we are not talking about specific talent, but i will tell you that sarah palin is the kind of personality who has a massive social media presence, 4 million facebook followers or something like that, and a core group of followers and supporters who hang on there ever -- on her every word. that is exactly the characteristic that these channels are looking for. we are looking for personalities who have that kind of connection with their fans. we are creating micro-channels for these fans that will make your dreams come true. everyone has someone that they would pay $10 per month to get more of. because traditional television cannot put on that many
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channels. we can. >> you must have a passionate fan base for this to work. >> this is not just you guys focusing on 3, 5, or six people. you want a really big list of people you will be working with. >> absolutely. there really is an infinite amount of possibilities. as long as you have a fan base that can support the expense of putting these channels together. you have to believe that you can gather about 25,000 or more subscribers paying around $10 per month for this to make financial success. is the model now, at least. it could change over time. >> we think that this is going to be one of the basic platforms for anyone with any kind of fan following. just like youtube has become that, we think that everyone is asng to have a tapp channel
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we move forward. >> any possible names you want to mention today? >> we really are just announcing the company today. we don't want to focus on any particular talent. >> but we do have a good roster in the works. right now we are in the middle over her sing the first channel that will roll out in the next several weeks and we are very excited about it. >> let's talk about the personalities who are behind .his effort discovery communications is one of your investors. eric schmidt is one of your investors. how did this group come together? my big question is -- does discovery have more involvement than just being an investor? does google, eric schmidt, do they have investment behind the scenes? >> discovery is on board. we have relationships with the
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people there. the other investors that you mentioned are not on our board, but they are great people to have and they are all eager to be participating in the next wave of disruption in the media business. >> the one thing that we found is that every time we talked to investors they all had individuals that they suggested. go talk to this one, go talk to this one. we would pay a subscription fee for this personality. our investors were very passionate around the idea and had personalities they thought would make for great channels. >> traditionally television is so tied to advertising. this is a business focused on subscription. what does that mean in terms of the future of television, which is still holding the upfront several year, catering to advertisers? every year, catering to advertisers?
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>> we think that there is room for both, although our for -- our focus at the beginning is almost exclusively prescription. just as radio lives alongside we see these subscription-based micro-channels like this living alongside traditional channels. >> these channels are really a complement to the current offering out there. they are very specific and they really target a super fan. this is not like netflix, where you pay a subscription and get a plethora of content. these are not general interest networks. these are very specific for very specific fan interests. >> because we are living in an age of specificity. you go online to look for the shirt that you want rather than wandering around macy's all day. >> super fans will be waiting. jeff, john, thank you for joining us here with those
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details. emily, back over to you. >> all right. coming up, we will talk more about bitcoin and roger mcnamee 's problem with it. in fact, he does not even care about bitcoin. we will tell you why, next. ♪
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♪ welcome back to "bloomberg west." i am emily chang. here the united states customers cannot target the exchange cash in u.s. bank accounts. one person not so interested in debating the future of bitcoin is roger mcnamee. though he did talk about the future of virtual currency. take a listen. >> what do you think of the whole bitcoin thing? >> who cares. this is a fun story to look at, but for investors it is not relevant. the important thing to recognize
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is that there are really important ideas that develop over time. some of which are just hard to get right. i think there are very few things that are harder to get right than our currency. >> you are saying bitcoin doesn't matter? or who founded it? >> either. there are at least three problems you have to solve to make any currency important or not. solve, problem they did which they did brilliantly, they built a global network that was completely independent of today's financial system. that was a hard problem to solve. >> and they remained anonymous. >> which is to say that it is beholden to a lot of people and you do not know who they are. the second problem you have to solve is if you can use it to buy things. clearly you can do that. but the one thing that really has to matter is you believe in it. it is a fiat.
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somethinggold, it is fake. trust truly matters. you have to do the first two before you do the third, bitcoin never got the chance to do the third, it blew up first. here is the thing, the world needs something like bitcoin to work. >> with it not be bitcoin? >> they could be a government currency. bloomberg isn't a great position, right? one of the problems is you have to be trusted. the agency that creates the thing has to be worthy of your trust. that for the same reason we were talking about the security problem before, the issue that we face today is that we live in a world where size matters more than right or wrong. the people who are the largest have a disproportionate voice in our economy. in politics. the biggest people get in their way. well, that is not good for the
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population as a whole. what would be really fantastic and, by the way, if you are going to do more transactions online, credit cards make less and less sense. you would love to have something native to the online world that could be used globally by absolutely everyone. that would be the idea. think of something as pervasive as facebook. who could do it? google could do it. facebook could do it. years ago i posted that they should become a bank. it would be so obvious. the same thing with facebook. they have not viewed that as their opportunity, but the reality is that if you became the bank of the internet, that would last a lot longer. >> you think that bloomberg to do this? >> definitely. again, if you want to actually use it to pay for anything? thehave to use it where
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people who use your currency are. >> but why? we have the u.s. dollar. we have currencies for trade. we have commodities that trade. that the snowden comment from earlier creates a business opportunity? so, currency is one of the opportunities it creates. >> what about the potential for the currency to be hacked or stolen? >> we redesigned the $100 bill twice in the last five years. why? it is easy to hack u.s. currency. i am thinking -- which part of hacking do you not think is happening now? >> and then the money printing notion of whenever there is a great ranting at the end of a great cause -- like 50ody has cash of billion? all of these illegal guys have gazillions of box built up -- bucks builds up.
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the demand will be huge. >> roger always has a unique perspective. >> i have known him for years and the funny thing is that he is hypothesis based, not fact-based. he tries out ideas, calls them worth a shot. >> interesting. we will see of google and facebook take a shot at starting a virtual currency. >> he is right, the notion that currencies are safe, forget that. the notion of counterfeiting is an interesting one that technology might reasonably solve. fewll right, well, i have a bitcoins. well, about $10 worth. i am just going to keep it in a store and we will see what happens. >> great. good luck with that. >> looking to hit the slopes? find out how a hot new ski commerce app can help you score
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some powder, next on "bloomberg west." ♪
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>> welcome back to "bloomberg west." airlines and hotels have been using dynamic pricing for decades -- for years, now the trend has hit the slopes. >> the ski industry say that they can help you by lift tickets and, more importantly, they are trying to fill of resorts in this really weird skiing, snowboarding year. we spoke to the ceo. we talked about the business, tripling revenues for the resorts that he uses. he tells me that, first of all, there are some good numbers behind this app. check it out. think that what we talk about, mostly, is the opportunity in this industry -- this is actually a $4 billion
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industry in north america alone. what we tend to see is folks using our platform windup booking as much as 60% of their business at an individual resort through the platform. what we are trying to do is influence as many resorts as possible to have an execution in which we grow the industry as a whole. >> i am seeing completely different technologies when it comes to lift tickets, buying the tickets. >> i think what we have seen is that this industry operates great for kids. it has a global infrastructure but historically they have not focused on making the software as sophisticated as the hardware. what we have done is proven to them that with sophisticated software they can price and sell their products in a way that is so common for airlines and hotels. >> those are the places that really seem to adapt to changes in the markets.
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can you do that with skiing and snowboarding? >> what we have proven is that as we have grown, we have proven to individual resorts that working with us means incremental business for their organization, which ultimately the customerfor base. we believe that there is a lot of opportunity to grow the sport . >> let me ask you, when you try to look at this business, why does it have to be a skiing commerce tool? just e-commerce? >> that is a great question. we already have some of our resort partners using this for their summertime operations. the principles for management and advanced sales for e-commerce that makes sense for skiing also make sense for other inventory. we have a lot of growth we are working towards before we go to broad. >> why specifically for skiing? rather than something within
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e-commerce itself that is not specific? why a skiing product? >> i see. so, focus is good. trying to be everything to everyone, naturally you lose efficiency. >> find the one thing you are better at than the general. >> understanding the unique characteristics of skiing, the price points that exist, the unique inventory, and how people respond to those, as opposed to an airline or hotel one of the key differences is they do not have the finite capacity. a hotel is 100 rooms. a ski resort or capacity is largely theoretically -- theoretical. they never booked to that capacity. that is how they price to create value for the consumer. been one ofthis has the weirdest years, at least in north america, in terms of snow. virtually nothing in california. i have never seen anything this
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dry in my lifetime. huge dumps in the northeast. the effect of climate change and the unpredictability of the , does this make your software more valuable? >> absolutely. whether you look at tocco this year, which is an extreme case, most resorts are somewhere between the extreme positive and the extreme negative. the way that we look at our software, it provides money for you in advance. it provides insulation in those extreme cases. >> yes, it was such a lousy year up in tahoe. it continues to be. >> i feel so bad for all of those skiers. i am not really one of them. hopefully next year will be better. right, time to focus on one number. what have you got?
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number four. four weeks from today, microsoft will stop supporting windows xp, launched in 2001. microsoft pulled the plug on support. roughly 40% of businesses are still running and does xp. this could be a real big business disruption for companies that did not do some kind of upgrade. >> obviously this whole idea of and enterprise businesses -- we were talking about xbox, earlier. obviously xbox is not doing as great as microsoft os right now, but potentially this new game, titans fall, can help, john. >> that is amazing. you should have no sympathy for any company that is still using microsoft xp and is worried about being vulnerable to security -- that, to me, is absolutely remarkable.
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they should be allowed to pull the plug on support for something like that. it has been around for something like 13 years. it takes 18 to 32 months for big enterprises to upgrade. there could be big security gaps for a while. it could be costly to productivity. on the other hand, it could help upgrades. >> what our customers saying? >> they will have to switch. >> are they going to quit, though? >> you wonder if microsoft will be backtracking. to, they no reason have been warning for a while. >> all right. thanks, guys. a quick programming note for all of you. do not miss bloomberg television tomorrow morning. all day we will have an exclusive interview, coming up tomorrow starting at 6 a.m. eastern time only on bloomberg television. thanks for watching this edition of "bloomberg west." ♪
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>> i am mark crumpton. the intersection of business and economics with the main street perspective. men's wearhouse and jos a bank strike a $1.8 billion deal. we will see how one of the world's most popular helicopters . to our viewers in the united states and to those of you joining us around the world, welcome. we have full coverage of

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